Conduit comprehensive income falls despite strong premium growth

(Sharecast News) - Reinsurance specialist Conduit Holdings reported strong premium growth across all segments for 2024 on Wednesday, with gross premiums written rising 24.8% to $1.16bn, although shares were sliding as comprehensive income fell in what it called a high catastrophe year. The London-listed company saw net reinsurance revenue increase 29.4% to $720m, driven by targeted expansion and favourable underwriting conditions.

However, comprehensive income fell 34.2% to $125.6m as the company absorbed losses from the large number and scale of catastrophes in 2024.

The firm said its combined ratio on a discounted basis rose to 86% from 72.1% in 2023, reflecting the impact of Hurricanes Helene and Milton as well as elevated risk losses.

Net investment income grew 57.4% to $65m, contributing to a 12.7% return on equity.

Tangible net assets per share increased to $6.70, up 12.9% including dividends paid during the year.

The company declared a final dividend of 18 cents per share, bringing the total for the year to 36 cents, in line with its policy.

Looking ahead, Conduit reported continued growth at the January renewals, with client partnerships supporting strong levels of business retention.

While the risk-adjusted rate change net of claims inflation declined modestly by 3%, pricing and underwriting terms remained attractive, the board said.

The company also renewed its retrocession programme on improved terms.

Conduit provided an initial estimate of $100m to $140m in losses from the January wildfires in southern California, net of reinsurance recoveries and reinstatement premiums.

The company cautioned that the estimate remained preliminary, with further updates expected in its interim results for the first half of 2025.

Despite the catastrophe losses, Conduit said its balance sheet remained strong, positioning it for further growth.

"On our IPO four years ago we set out with a target of delivering mid-teens returns on equity and gross premiums written of $0.9bn in year four," said executive chairman Neil Eckert.

"Our premium in 2024 was $1.16bn which is 30% above our IPO target, in addition we achieved a 12.7% return on equity in a high industry loss year following on from a 22% ROE in 2023.

"We can be proud of what this business has achieved and, with a strong capital base and a robust, efficient platform that is still in its growth phase, I am very excited for the future."

At 1147 GMT, shares in Conduit Holdings were down 7.89% at 402.5p.

Reporting by Josh White for Sharecast.com.